Are you newly retired or thinking about retiring? Have you got a plan for the next phase of your life or are you going to wing it?
Whatever your situation, the good news is it’s never too late to crack your retirement nest egg in the most advantageous way.
My retirement date will be?
If you decide to retire earlier than the ‘usual’ age of 65, each extra year will be one less you’ll have to save for retirement and one more you’ll have to fund. If you retire after age 65, you can continue the tax-saving, income-building advantages of your RRSP until the end of the year in which you turn 71.
My retirement lifestyle will be?
Maybe you’ll decide to keep working full-time or part-time, even start a business. If so, you can afford to save less in advance because even a modest amount of extra employment income can go a long way.
Be sure to factor in the additional costs for health care that are often a by-product of aging and look at income protection options that will help cover these additional costs.
My retirement income sources are?
Varied — ranging from your personal savings, company pensions, investments held within a RRSPs or TFSAs and non-registered investments to government sources including the Canada Pension Plan/Québec Pension Plan (CPP/QPP) and Old Age Security. Add ’em all up.
Will my retirement paycheque be sufficient to sustain my lifestyle?
Find out by identifying your continuing costs and expenses. Take inflation into account and the happy fact that you could need that income for 40-plus years. Establish a mix of investments that will bridge the gap and deliver the cash flow you will need without depleting your underlying assets.
My taxes will be?
Minimized — with a withdrawal plan for your registered and other income-producing investments that takes full advantage of all the tax benefits available to you, such as age and pension income credits, while avoiding OAS clawbacks.
There are other ways to reduce taxes and increase your retirement income to the comfortable level you seek. Your professional adviser can help you evaluate and take full advantage of those that will work for you.
J. Kevin Dobbelsteyn is a certified financial planner with Investors Group Financial Services Inc.. His column appears every Wednesday.